Cabinet Clears Rs7,280 Cr Scheme for Rare Earth Magnet Manufacturing in India

Cabinet Approves ₹7,280-Crore Plan to Boost Rare Earth Magnet Production

The Union Cabinet, led by Prime Minister Narendra Modi, has approved a major industrial policy initiative worth Rs7,280 crore aimed at developing rare earth permanent magnet (REPM) production capacity within India. This step is expected to significantly reduce reliance on foreign imports and strengthen high-tech sectors that depend on these specialised materials.

The scheme — officially titled “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets” — targets the establishment of an annual production capability of 6,000 metric tonnes . Rare earth magnets are integral to numerous next-generation technologies, from electric motors and wind turbines to missile guidance systems, medical equipment, industrial automation, and consumer electronics.

Implementation Roadmap and Strategic Scope

The initiative will run over a seven-year period , including two years for facility establishment followed by five years of incentive distribution . Incentives will be directly tied to market-linked sales, encouraging operational efficiency and scalability. The Ministry of Heavy Industries will implement the scheme alongside India’s technical and strategic ministries.

Why This Matters for India

India currently sources most of its rare earth materials — and nearly all sintered magnets — from abroad, with China as the dominant supplier . A local manufacturing ecosystem could transform India into a competitive hub for magnet technology, directly supporting electric mobility, defence manufacturing, aerospace components, power electronics and renewable energy infrastructure. The policy also aligns with Atmanirbhar Bharat and Make in India missions, promoting domestic value addition across critical mineral processing and magnet fabrication.

Exam-Friendly Key Points

• Total scheme outlay: Rs7,280 crore

• Target output: 6,000 MTPA of REPMs

• Duration: 7 years (2-year setup + 5-year incentive phase)

• Key sectors: EVs, defence, electronics, renewable energy aerospace